Defense Contractors Charged with North Island Bribery

The U.S. Attorney's office today (Aug. 23) announced the unsealing of an indictment charging two defense contractors and one company of conspiring with Navy officials to commit bribery, wire fraud, and money laundering at the Naval Air Station, North Island, Coronado. Charged were Robert Ehnow, president of Poway's L&N Industrial Tool & Supply; Joanne Loehr, owner of Poway's Centerline Industrial, and Centerline itself. All three were arraigned in federal court today and pleaded not guilty.

According to the indictment, the contractors provided Navy officials with lavish gifts including flat screen TV sets, home furniture and appliances, remodeling services, and cash. The Navy officials then placed millions of dollars of government orders with the contractors.

As it turned out, according to the government, the contractors submitted fraudulent invoices to the Department of Defense, which was unknowingly paying for the cost of bribes to the Navy officials. The contractors routinely charged a markup on such invoices. L&N filed bankruptcy last year, but Centerline is still in business. The seven Navy officials who have already pleaded guilty are Donald Vangundy, Kiet Luc, Brian Delaney, David Lindsay, John Newman, Michael Graven, and Paul Grubiss.